| Reportable Segments |
(14) Reportable Segments
(a) |
Summary of Reportable Segments |
The Company’s operations, which are located in the United States, are organized into two reportable segments: (i) gathering and processing and (ii) water handling. These segments are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Management evaluates the performance of the Company’s business segments based on operating income. Interest expense is primarily managed and evaluated on a consolidated basis.
Gathering and Processing
The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in West Virginia and Ohio. The gathering and processing segment also includes equity in earnings from the Company’s investments in the Joint Venture and Stonewall.
Water Handling
The Company’s water handling segment includes two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways. Portions of these water handling systems are also utilized to transport flowback and produced water. The water handling systems consist of permanent buried pipelines, surface pipelines and water storage facilities, as well as pumping stations, blending facilities and impoundments to transport water throughout the systems used to deliver water for Antero Resources’ well completions.
(b) |
Reportable Segments Financial Information |
The summarized operating results of the Company’s reportable segments are as follows:
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Three Months Ended September 30, 2021 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
188,716 |
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53,511 |
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— |
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242,227 |
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Revenue–third-party |
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— |
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245 |
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— |
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245 |
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Amortization of customer relationships |
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(9,271) |
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(8,397) |
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— |
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(17,668) |
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Total revenues |
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179,445 |
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45,359 |
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— |
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224,804 |
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Operating expenses: |
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Direct operating |
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16,161 |
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23,338 |
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— |
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39,499 |
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General and administrative |
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9,076 |
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4,554 |
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1,180 |
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14,810 |
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Facility idling |
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— |
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|
870 |
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— |
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|
870 |
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Depreciation |
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15,151 |
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12,336 |
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— |
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27,487 |
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Impairment of property and equipment |
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— |
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203 |
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— |
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203 |
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Accretion of asset retirement obligations |
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— |
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|
114 |
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— |
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|
114 |
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Total operating expenses |
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40,388 |
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41,415 |
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1,180 |
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82,983 |
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Operating income |
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$ |
139,057 |
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3,944 |
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(1,180) |
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141,821 |
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Equity in earnings of unconsolidated affiliates |
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$ |
24,088 |
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— |
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— |
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24,088 |
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Additions to property and equipment |
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$ |
69,069 |
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13,514 |
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— |
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82,583 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Three Months Ended September 30, 2022 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
185,640 |
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61,411 |
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— |
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247,051 |
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Revenue–third-party |
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— |
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1,651 |
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— |
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1,651 |
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Amortization of customer relationships |
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(9,271) |
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(8,397) |
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— |
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(17,668) |
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Total revenues |
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176,369 |
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54,665 |
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— |
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231,034 |
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Operating expenses: |
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Direct operating |
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19,813 |
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26,835 |
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— |
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46,648 |
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General and administrative |
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9,890 |
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2,425 |
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1,272 |
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13,587 |
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Facility idling |
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— |
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|
865 |
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— |
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|
865 |
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Depreciation |
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21,177 |
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13,029 |
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— |
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34,206 |
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Accretion of asset retirement obligations |
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— |
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50 |
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— |
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50 |
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Gain on asset sale |
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(2,056) |
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(36) |
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— |
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(2,092) |
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Total operating expenses |
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48,824 |
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43,168 |
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1,272 |
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93,264 |
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Operating income |
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$ |
127,545 |
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11,497 |
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(1,272) |
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137,770 |
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Equity in earnings of unconsolidated affiliates |
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$ |
24,411 |
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— |
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— |
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24,411 |
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Additions to property and equipment, net |
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$ |
58,742 |
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15,378 |
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— |
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74,120 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Nine Months Ended September 30, 2021 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
566,544 |
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167,832 |
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— |
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734,376 |
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Revenue–third-party |
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— |
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340 |
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— |
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340 |
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Amortization of customer relationships |
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(27,813) |
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(25,191) |
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— |
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(53,004) |
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Total revenues |
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538,731 |
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142,981 |
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— |
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681,712 |
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Operating expenses: |
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Direct operating |
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50,409 |
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67,959 |
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— |
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118,368 |
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General and administrative |
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26,459 |
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17,107 |
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3,425 |
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46,991 |
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Facility idling |
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— |
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3,033 |
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— |
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3,033 |
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Depreciation |
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44,268 |
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36,688 |
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— |
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80,956 |
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Impairment of property and equipment |
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1,218 |
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|
364 |
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— |
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1,582 |
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Accretion of asset retirement obligations |
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— |
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|
347 |
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— |
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|
347 |
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Loss on asset sale |
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3,628 |
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— |
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— |
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3,628 |
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Total operating expenses |
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125,982 |
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125,498 |
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3,425 |
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254,905 |
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Operating income |
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$ |
412,749 |
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17,483 |
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(3,425) |
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426,807 |
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Equity in earnings of unconsolidated affiliates |
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$ |
66,347 |
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— |
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— |
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|
66,347 |
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Additions to property and equipment |
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$ |
120,727 |
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|
36,221 |
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— |
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|
156,948 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Nine Months Ended September 30, 2022 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
552,154 |
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176,994 |
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— |
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729,148 |
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Revenue–third-party |
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— |
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2,288 |
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— |
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2,288 |
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Amortization of customer relationships |
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(27,814) |
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(25,190) |
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— |
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(53,004) |
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Total revenues |
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524,340 |
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154,092 |
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— |
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678,432 |
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Operating expenses: |
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Direct operating |
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56,338 |
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75,621 |
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— |
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131,959 |
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General and administrative |
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|
30,081 |
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13,015 |
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4,501 |
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47,597 |
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Facility idling |
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— |
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|
3,198 |
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— |
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3,198 |
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Depreciation |
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|
59,838 |
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|
38,343 |
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— |
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|
98,181 |
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Impairment of property and equipment |
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1,130 |
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|
2,572 |
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— |
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3,702 |
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Accretion of asset retirement obligations |
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— |
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|
178 |
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— |
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|
178 |
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Loss on settlement of asset retirement obligations |
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— |
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|
539 |
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— |
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|
539 |
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Gain on asset sale |
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(2,119) |
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(123) |
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— |
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(2,242) |
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Total operating expenses |
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145,268 |
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133,343 |
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|
4,501 |
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|
283,112 |
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Operating income |
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$ |
379,072 |
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20,749 |
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(4,501) |
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|
395,320 |
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Equity in earnings of unconsolidated affiliates |
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$ |
70,467 |
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— |
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— |
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|
70,467 |
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Additions to property and equipment, net |
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$ |
190,407 |
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|
45,747 |
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— |
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|
236,154 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
The summarized total assets of the Company’s reportable segments are as follows:
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(Unaudited) |
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December 31, |
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September 30, |
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(in thousands) |
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2021 |
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2022 |
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Gathering and Processing |
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$ |
4,450,939 |
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4,489,750 |
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Water Handling |
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1,092,122 |
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1,073,000 |
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Unallocated (1) |
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|
940 |
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|
1,071 |
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Total assets |
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$ |
5,544,001 |
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5,563,821 |
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| (1) |
Certain assets that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.
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